updated 12/17/2007 8:00:30 AM ET 2007-12-17T13:00:30

Ingersoll-Rand Co. will acquire Trane Inc. in a $10.1 billion deal that would create one of the world's largest makers of air conditioners, the two companies announced Monday.

The deal gives Ingersoll-Rand, which makes Thermo King refrigerated trucks, access to Trane's building and transportation cooling systems.

"This acquisition represents a significant next step in Ingersoll-Rand's decade-long transformation to become a leading global diversified industrial company, with strong market positions across the climate control, industrial and security markets," said Chief Executive Officer Herbert Henkel.

Bermuda-based Ingersoll-Rand Co. manufactures everything from golf carts to home security and has a significant climate control business.

Piscataway, N.J.-based Trane, formerly known as American Standard Companies Inc., focuses its business almost exclusively on residential and commercial climate control.

Combining the climate control operations of Trane and Ingersoll-Rand "creates a very strong business," said Fred Poses, Trane chairman and CEO.

The combined companies are expected to have 2008 revenues of $17 billion, Henkel said.

Under the terms of the agreement, which is one of the largest industrial buyouts in recent years, Trane shareholders will receive a cash-and-stock trade: Ingersoll-Rand agreed to pay the shareholders $36.50 plus 0.23 of its shares for each Trane share.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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